Foreign workers in Mauritius to exceed 40000: Boon or bane?
A debate rages over whether these skilled workers are a boon to the economy or a bane to local workers’ employment prospects. (Image: LIVECOMM)
Even as foreign workers in Mauritius are poised to overshoot 40,000 by year end, representing a whopping 20% increase over 2008, a debate rages over whether these skilled workers are a boon to the economy or a bane to local workers’ employment prospects.
First up, it is essential to evaluate the impact of hiring foreign workers on local employment prospects. A report by the National Economic Social Council (NESC) published last month entitled ‘Youth Unemployment: Improving Employment prospects’ revealed that as many as 20,000 young Mauritians are awaiting employment.
Their ages range from 16 to 24 years and, to give further pause for thought, there are 5,000 graduates among their ranks. More shockingly, the report highlights that youth unemployment rate was 24.4% in 2012, compared to the overall unemployment rate which stood at 8.1%, making it three times the overall unemployment rate.
In this context, the NESC pointed out the “paradox that even with thousands of low skilled youth unemployed, employers report that several sectors, notably construction, textile, trade and services sector in particular are crippled by labour shortages and are forced to turn to foreign labour.”
The report further recommended that a study be commissioned to identify the reasons as to why locals are shunning jobs that are being taken up by foreign nationals.
Thus, it appears that there is indeed an adverse impact on employment, especially for the youth, of bringing in overseas workers to fill in domestic vacancies in the island economy.
On the other hand, the favourable impact of foreign workers on the economy and consumption cannot be denied.
First and foremost, foreign workers bring essential skills set which may be missing in the local population, due to lack of vocational training or absence of supportive educational infrastructure.
Moreover, as the NESC report itself points out, “it has been reported that several youth tend to be choosy on the jobs on offer”. Thus, for low skilled jobs, where there are few takers from the local population, foreign workers become crucial to meet labour shortages and to ensure a smoothly running economy.
Finally, the island nation, with a population of merely 1.29 million, needs external help to boost domestic demand, and this is where foreign workers come to the rescue.
Rinsy Ansalam, MD and CEO, Bourse Africa, pointed out that when overseas workers enter the island economy, there is a multiplier effect on consumption.
He stated, “When a worker comes in, he brings his family with him. Thus, consumption increases at a family level, rather than an individual level. Further, he needs a house so real estate gets a boost, his children need education so the education sector gets a boost, and he needs consumables and white goods so the retail segment gets a boost.”
Coming to the actual numbers, the figure for valid work permits corresponding to foreign workers at October end stood at 39,032, comprising 27,408 new work permits and 11,624 renewals.
Of these, the majority of work permits were issued to Asians with Bangladeshi workers leading at 18,429, followed by India at 9,105, then China at 4,656 and finally Sri Lanka at 1,845. The neighbouring island of Madagascar also contributed significantly to incoming workers at 3,596.
On a sector wise basis, the manufacturing sector employs the largest number of foreign workers at 29,846, while construction came second with 6,070 workers hailing from overseas.
Last September, the Ministry of Labour took the decision to freeze the recruitment of foreign workers in the construction sector, so their numbers are gradually dwindling.
The above data has been compiled by the Ministry of Labour on the basis of information collected at the thirteen Employment Information Centres (EICs) throughout the island and at the different units of the Employment Service Main Office.